Darling looks forward to November and his pre-budget report.

Chancellor Alistair Darling has recommended a pay freeze for 40,000 senior public servants in 2010/11. Darling has written to salary review bodies calling on them to freeze the pay of top level civil servants, such as judges, senior NHS managers as well as General Practitioners. It is expected that public spending priorities and cuts will be announced in this autumn’s pre-Budget report, as the chancellor revealed he would soon be calling ministers into the Treasury for “very robust” discussions.

If the Financial Services Authority (FSA) get their way UK banks and investment firms would have to increase their holdings of cash and government bonds by £110 billion as well as reducing their reliance on short-term funding by as much as 20 per cent in the first year. This series of tough liquidity standards put forward by the FSA on Monday shows a radical firming up of liquidity requirements than in previous years. In total banks and investment firms could be required to increase their holdings of easily redeemable assets by a total of £370 billion as well as reducing their reliance on short-term funding by 80 per cent from current levels

Chief executive of the HSBC bank, Michael Geoghegan, is less convinced than many others that the global financial recovery is well under way. He has in fact taken the standpoint that a second downturn is bound to happen in the coming months. In preparation, Geoghegan plans to freeze any expansion plans for the bank till the situation becomes clearer. Speaking after HSBC announced a shake-up of its governance 10 days ago, Mr. Geoghegan is now responsible for strategic issues that previously lay with the bank’s chairman, Stephen Green.

Taking a more conservative stance on salaries are the Lloyds Banking Group, who are reportedly in the early stages of reviewing pay packages for its top executives. Lloyds, who got themselves into hot water when they rescued struggling lender HBOS last year, pledged to review remuneration after the government backed takeover. The bank did issue a statement over the weekend that no decisions had yet been made on salaries and the bank was more focused on a number of other and more pressing issues, particularly whether they will enter the government’s asset protection scheme.

According to market analysts, many British retailers are facing a worse Christmas than last year, when 15 major chains failed, rising unemployment and fragile consumer confidence would result in many companies, many of them struggling to survive until the holiday season entering formal insolvency proceedings within a year. Market information shows that 125 retail companies encountered critical trading and cash problems in September, up 37 percent from August. Outdoor goods retailer Blacks Leisure showed how difficult it is to survive in the UK high street, by announcing plans to shut down 89 of their loss making stores as well as cutting jobs as part of an emergency recovery plan.

Bucking the retail trend is the department store chain TJ Hughes, who has based their success in specialising in discounted branded goods. The company has reported a 30 percent increase in underlying profits in the year to the end of January. Hughes, who operates in 50 locations across England, Scotland and Wales, announced pre-tax earnings that rose to £9.2 million. Since June 2008, TJ Hughes has undergone aggressive expansion and a 51st store is expected to open soon

The FTSE 100 limped back over the 5,000 points mark, rising 35.63 points to close on 5024.33. The FTSE 250 made its usual early in the week recovery rising 82.57 points to close on 8982.53.

The pound continued to find it difficult to rise above the $1.60 mark, while falling behind against the remaining principal currencies.

• Pound/US dollar 1.597
• Pound/Euro 1.10863
• Pound/Japanese Yen 142.4066
• Pound/Swiss Franc 1.6421

A recent survey has shown the US services industry rising in September for the first time in a year. The services sector accounts for 80% of the US economy. Simultaneously, separate data released showed that the US jobs market also strengthened last month for the first time since January 2008. The data boosted US markets with the Dow Jones index and NASDAQ both rising

The Dow Jones index rose by 112.08 points at 9,599.75. The NASDAQ index rose by 20.04 points to finish the day’s trading on 2,068.15.

Hundreds of farmers have protested to European Union (EU) agriculture ministers at a meeting held in Brussels to discuss low milk prices. The urgently convened meeting came as a result weeks of protests across Europe, with farmers dumping milk stocks and withholding supplies at what they see as being sold at uneconomic prices. To the farmer’s considerable chagrin, the only decision reached at the meeting was to create a panel of experts to examine at the dairy sector. Recently prices of milk and dairy products have fallen sharply in Europe as supply exceeds demand.

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